By George Howard

Copyright law, which governs much of the music business, attempts to strike a balance between the rights of the creator, and the common good. That is, the law grants copyright holders a set of exclusive rights, but only for a limited time. At the end of that time (currently, seventy years after the death of the last-living author in the US), the work falls out of copyright, and can then be used by anyone; thereby contributing to the common good.

The Laws About Covering a Song

It’s not just this expiration of copyright that attempts to strike the balance between the rights of the individual and the common good. For instance, once an artist commercially releases a song, anyone who desires to can re-record the song (i.e. cover it), and release his or her version so long as the person who covers the song adheres to the rules. These rules, known as the compulsory or statutory license, define precisely what the artist who covers another’s work must do to avoid problems. Specifically, unless otherwise negotiated, the artist who creates the cover must pay the original writer (or her publisher) the maximum statutory rate for every reproduction of the cover. The rate is currently $.091 per reproductions (just under a dime) for songs under five minutes in length. Additionally, the person covering the song must account to the original author every month.

These requirements notwithstanding, the original author cannot stop another artist from covering his or her work. They are compelled to license their exclusive copyright to any other artist who wants to cover it, so long as the artist covering it abides by the rules emphasized in the copyright code. “Compelled” means that the original author of the song can’t say no.

Whether you agree or disagree with this approach, it should be fairly obvious that this compulsory license shows the law attempting to strike the delicate balance between giving the copyright holder his or her due rights, while still allowing others to create and benefit from their own covered works. The proof is somewhat in the pudding.

Covers are a pervasive and important part of the music business. Many artists benefit from the compulsory law by being able to easily (and without infringing) perform and record/reproduce/distribute their versions of another’s song. This often results in interesting new versions of works being created that, if not for the compulsory license regulations, would never have seen the light of day. Of course, because of these compulsory rules, the original author also benefits financially. Certainly, it may not be a perfect balance, but it seems to work.

How Derivatives Work

The fact that it does seem to work fairly well makes it all the more curious that such an approach has not been put in place for other elements of copyright. Specifically, the exclusive right to prepare derivative works. Derivatives are new works drawn (or “derived”) from another work. A simple example is a translation. Only the copyright holder of the original work can create derivatives. Therefore, if some other artist records a version of a work in a different language, this artist will be deemed to be infringing upon the original author’s exclusive right to prepare derivative works.

Of course, it goes way beyond translations. Samples are a form of derivative works. That is, if you pull a portion of someone else’s work and insert it into your own work, you are deemed to be creating a derivative of the work from which you sampled. You can’t do this without the consent of the rights holders of the original works: the copyright holder of the song itself (typically, the writer/publisher), and the copyright holder of the sound recording (typically, the label).

Unlike when you cover a song, and rely on the compulsory license regulations to both grant you the rights to cover the song in the first place, and to outline your responsibilities (amount you must pay, when you must pay, etc.), there is no such compulsory license when it comes to derivatives.

Any time an artist desires to sample a work (or “replay” it; that is, record his or her own version of a portion of a song rather than sampling it from a master recording) the artist must negotiate with the rights holders, and the rights holders can set whatever terms they want (or just deny the request all together).

Why is this?

It strikes me as odd that you can, without going through this expensive and arduous process, cover whatever song you want…in its entirety. But, if you want to sample five seconds of that same song, you can’t do so in any easy or cost-effective manner.

This discrepancy between there being a compulsory license for covers, but not for samples (or other derivatives) strikes me as not following the intent of copyright; it does not seem to strike the balance between the rights of the creator and the common good. It appears to err too far towards the rights of the creator, and leave the common good wanting.

There are likely arguments having to do with the rights of the author to control the context of his work at the root of this discrepancy. That is, the original author might not want her work sampled and added into a work that she finds repugnant. Fair enough. However, this “logic” doesn’t really hold up under scrutiny. There are plenty of covers that the original authors likely find repugnant, and yet they can’t do a thing about it.

A License to Consider

My proposal, therefore, is that we work towards a compulsory license for derivative works. Perhaps, it could be some sort of sliding scale. For a certain number of reproductions and streams, the sampler must pay the copyright holders a certain amount, and that amount increases when certain thresholds of reproductions or streams are met.

For instance, perhaps the artist being sampled might split 25% of the copyright of the work that samples their copyrighted works, so long as there are fewer than 10,000 reproductions and 100,000 streams. That amount could increase to 50% of the copyright from 10,001 reproductions to 100,000, and from 100,001 streams to 500,000. Maybe it increases from there. Importantly, neither the copyright holder of the composition nor the copyright holder of the sound recording can say no; they are compelled to allow for the derivative (sample) to take place.

Certainly, monitoring the number of reproductions and/or streams, and accounting accurately won’t be easy, but it’s not easy to monitor reproductions and/or streams for covers.

Creating a compulsory license for derivatives would not only satisfy the stated goal of copyright: the common good, but would also increase revenue-generating opportunities—for both the party doing the sampling, and the parties being sampled—at a time in the music business when we could certainly use some additional revenue being generated.

George Howard is the COO of Concert Vault, Daytrotter, and Paste Magazine. Mr. Howard is an Associate Professor of Management at Berklee College of Music. Follow George on Twitter.

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